Parsons' Broadband Dilemma


Things took a dramatic turn at AOL Time Warner Inc. last week, when chairman Steve Case resigned and, days later, CEO Dick Parsons was also named chairman of this mega-mess of a media company.

In the middle of those two announcements, CNN News Group president Walter Isaacson threw in the towel, announcing that he was off to greener pastures, to run a think tank.

But the biggest problem that Parsons must now grapple with is how to fix America Online, the shoot-from-the-hip online-service provider that had acquired the old and venerable Time Warner Inc. in 2000.

AOL has hit the wall hard. Subscriber growth for its mainstream dial-up online service has stalled at 35 million homes. Worse yet, advertising revenues for the company are about half of what they used to be.

In many respects, Parsons has become the referee for all of the bickering units within this giant company. Here's a question I've never seen a good answer for, and not for a lack of asking: How does the company grow Road Runner, Time Warner Cable's modem service and AOL Broadband at the same time?

In an earlier column I wrote about my flirtation with AOL Broadband. Later a Time Warner Cable staffer asked me, "Why bother with AOL, when Road Runner is better and cheaper?"

Clearly the internal bickering has not abated. Now, Parsons must aggressively market AOL Broadband. The company is spending a ton of money to market the service via TV ads and free, 30-day trials. So far, AOL Broadband has attracted somewhere between 2.5 million to 3 million subscribers.

I took the bait for AOL Broadband and I hope Parsons benefits from my experience.

The good news is that I love it, actually far more than my old Optimum Online cable modem from Cablevision Systems Corp. — largely because I don't see much compelling content on my cable-modem service and look at it largely for speedy connectivity.

But the bad news is that a real customer — not someone like me, who pulls strings when things go south — is going to have a very tough time with AOL Broadband.

It took a month of missteps and miscues to now be able to zoom along on my AOL Broadband-dedicated digital subscriber line. In early December, I had responded to AOL Broadband's free, 30-day offer. E-mails would come saying when I would get it, but the date kept being pushed back. Worse, Verizon — after knocking out phone service to our home in the process — was insisting that we were up and ready to roll.

I finally called a pal at AOL Broadband and he moved the mountain. In the end, my phone line had to be rewired because it was a mix of copper and fiber. To run this puppy, it has to be all copper.

The AOL Broadband mantra of "Easy as 1,2,3" was just that. But I couldn't believe it was shipped with a disc containing America Online version 7.0, not 8.0 — the iteration required for all of the exceptionally compelling content on the new AOL Broadband.

So I'd imagine that resolving the company's broadband agenda is at the top of Parsons's to-do list. It would top mine. I don't envy him.